A judge in the northeastern region of Catalonia remanded him in custody on Friday and stripped his wife of custody of their child for "alleged fraud with regards to the demand for money they made for treatment for their daughter", a court spokeswoman said.
The case of the young Nadia Nerea, who suffers from a rare, potentially life-threatening genetic disorder, had moved the country after Blanco went from one media outlet to another to publicise her case, saying a pioneering operation in Houston in the United States could save her life.
Police said on Friday in a statement that her parents had raised €918,000 ($969,000) for Nadia's treatment, but spent close to €600,000 euros of that on other things.
Blanco's story was tragic: the doctors had told him his daughter would die from trichothiodystrophy, which in mild cases only gives patients brittle hair but when severe causes delayed development, intellectual disability, and recurrent infections that can lead to death at an early age.
He would not give in, though, and said he had travelled all over the world, contacted the best specialists, including an eminent geneticist who lived in a cave in Afghanistan.
But this week, the Spanish media outlets El Pais and Hipertextual cast serious doubt on the story.
They said there was no proof of his travels, the hospital in Houston didn't exist, nor did the alleged pioneering treatment, and Edward Brown, the supposed genetics specialist who conceived it, did not appear in any registry.
On Monday, a judge launched a probe for alleged fraud.
Two days later, police detained Blanco after he fled a police check near the border with France.
He had on him €1,450 euros in cash, two watches, various electronic devices and a blank firing gun, police said.
Police also raided the family home in the small mountainous village of Figols d'Organya, where they found some 30 luxury watches worth €50,000, three tablet computers, high-end mobiles and marijuana.